EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936631
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Halliburton Pty Ltd applied for a TCO in respect of certain offshore prefabricated cabins on 28 September 2009.
Instrument
TCO No 0936631 was made on 04 December 2009. It declares that those certain offshore prefabricated cabins are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0936631 is taken to have come into force on 28 September 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise duties. To address the need for tariff concessions for certain imported goods, Part XVA of the Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are designed to provide a lower rate of customs duty on specified goods, provided that the application meets the core criteria set out in the Act. The Tariff Concession Instrument No. 0936631, made in 2010, exemplifies the application of this framework, granting a tariff concession to Halliburton Pty Ltd for certain offshore prefabricated cabins. The policy objective of this legislation is to facilitate the importation of goods that are not produced domestically, thereby supporting the availability and affordability of such goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0936631, which relates to the Customs Act 1901, governs the application and implementation of Tariff Concession Orders (TCOs) for specific goods, thereby providing a lower rate of customs duty. This Act applies to any person or entity seeking a tariff concession for goods that are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The application must meet the core criteria set out in section 269C, particularly ensuring that no substitutable goods are produced in Australia on the date of application. The geographical reach of this legislation is national, as it pertains to the Customs Act 1901, a Commonwealth Act. The instrument, TCO No. 0936631, was made on 4 December 2009, declaring that certain offshore prefabricated cabins are subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, provided no substitutable goods were produced in Australia at the time of the application. The application process includes publishing a notice in the Gazette to invite submissions from any person who may object to the concession, although no submissions were received for this particular instrument. The commencement date for the TCO is the date the application was lodged, 28 September 2009, and it does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. The CEO must then decide if the application meets the core criteria as outlined in section 269C, which includes ensuring that no substitutable goods were produced in Australia at the time of the application. If these criteria are met, section 269P(3) requires the CEO to make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application is valid and meets the criteria specified under section 269C. The CEO is required to review the application and make a decision based on the core criteria. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must also consider any submissions received and decide whether or not to make the TCO.
The legislation includes provisions for offences, penalties, and consequences for breaches. However, the explanatory statement does not explicitly state any specific penalties for breaches related to the TCO. Generally, under the Customs Act 1901, breaches of the Act or Regulations can lead to civil or criminal penalties, including fines and imprisonment. The maximum penalties can vary depending on the nature and severity of the breach.
Civil consequences may include financial penalties for non-compliance, such as failure to pay the correct duty rates, while criminal consequences can include prosecution and potential imprisonment for more serious breaches. The precise penalties would be determined based on the specific breach and the relevant sections of the Act or Regulations that are contravened.
Overall, the legislation sets out a clear process for applying for and obtaining a TCO, while also imposing obligations on both the applicant and the CEO to ensure the process is followed correctly.